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Axa Private Equity Said to Seek More Capital for Secondary Fund

February 01, 2012

Feb. 1 (Bloomberg) -- Axa Private Equity, an arm of French insurer Axa SA, is asking investors for permission to raise an additional $1 billion for a pool that can buy stakes in existing funds, according to two people with knowledge of the situation.

The firm, based in Paris, is requesting that the hard cap, or limit, on how much capital Axa Secondary Fund V LP can collect be lifted to $5 billion from $4 billion, said the people, who asked not to be identified because the fund is private. The firm wants to take advantage of a surge in sellers offering fund stakes, one of the people said.

The Axa pool would be among the largest secondary funds. The firm’s prior fund raised $2.9 billion in 2006. Secondary transactions rose to a record volume of about $25 billion in 2011 and will probably stay at about that level this year, according to a pricing report in January by New York’s Cogent Partners, a market intermediary.

Elizabeth Shapiro, a spokeswoman for Axa Private Equity, declined to comment.

Secondary funds purchase existing investor stakes in private-equity funds. They’re typically buying when a fund is producing profits and making distributions to limited partners.

Financial institutions are marketing big portfolios either to get rid of noncore holdings or in response to new banking regulations. Institutional investors led by pension plans are using the secondary market to reduce the number of relationships they have with money managers, or to free up capital to invest in new funds coming to market.

Secondary firms are seeking money in what is still a difficult fundraising market, which could create more supply than demand.

Buyer’s Market

“If you look at the total dry powder currently available in secondary funds, it is in the range of $30 billion to $35 billion to invest over the next few years,” David de Weese, head of secondary deal sourcing at New York-based Paul Capital, said in an interview last month. “If we see $40 billion in secondary opportunities in 2012 alone, the assets for sale dwarf the ability to purchase them.”

Axa Private Equity began marketing its latest secondary fund in 2010 with a target of $3.5 billion. It has raised about $3 billion and invested $1.7 billion, according to the people familiar with the fundraising.

The firm deployed $3.8 billion in secondary deals across its funds last year, one of the people said. The deals included the purchase of $1.7 billion in private-equity assets from Citigroup Inc.

--Editors: Josh Friedman, Christian Baumgaertel

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To contact the reporter on this story: Sabrina Willmer in New York at

To contact the editor responsible for this story: Christian Baumgaertel at

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